Strong profitability and cash flow in 2019 JANUARY-DECEMBER 2019 - - PowerPoint PPT Presentation

JANUARY-DECEMBER 2019

Strong profitability and cash flow in 2019

JARI ROSENDAL, PRESIDENT AND CEO PETRI CASTRÉN, CFO FEBRUARY 11, 2020

Selected highlights in 2019

• Good global demand in 2019 although shale

market softened towards the end of the year and some softness was visible in Pulp & Paper

• Focus on value over volume clearly visible in

financials, strong profitability improvement in 2019 with operative EBITDA margin reaching 15.4%

• Investments starting to gradually contribute to

EBITDA from Q1 2020 onwards:

• AKD-wax production facility in China
• CEOR polymer capacity addition in the Netherlands
• Bleaching capacity expansion in North America
• Smooth operational performance; improved

customer and employee satisfaction

Financial highlights of 2019

Focus on value over volume

• Our pricing management was successful in driving

higher profitability despite some loss of volume

• Oil & Gas growth in shale, CEOR* and tailings

water treatment Operative EBITDA +27% to margin of 15.4%

• Effective price and cost management
• Turnaround in water treatment in North America
• Q4 negatively impacted by softer shale and new

plant start-up costs Earnings per share +24% to EUR 0.72

• Increase driven by higher operative EBITDA

Strong cash flow from operating activities Dividend proposed to be increased by 6% following strong cash flow

EUR million (except ratios)

Q4 2019 Q4 2018 Δ% FY 2019 FY 2018 Δ% Revenue 657.7 661.8

• 1% 2,658.8 2,592.8

3% Operative EBITDA 90.1 84.5 7% 410.0 323.1 27%

• f which margin

13.7% 12.8%

• 15.4%

12.5%

• Operative EBIT

42.4 44.8

• 5%

224.0 173.8 29%

• f which margin

6.4% 6.8%

• 8.4%

6.7%

• Net profit

8.6 26.5

• 68%

116.5 95.2 22% EPS diluted, EUR 0.05 0.17

• 72%

0.72 0.58 24% Cash flow from

• perating activities

142.5 88.2 62% 386.2 210.2 84% Dividend per share, proposal by the BoD, EUR** 0.56 0.53 6%

**Board of Director’s proposal to the AGM 2020 *CEOR, chemical enhanced oil recovery

Pulp & Paper – profitability improved in 2019

Market environment

• Some softness in near-term market demand; long-

term growth drivers solid Organic growth -3% in Q4; -2% in 2019

• Intentional focus to improve product mix
• Exit of ECOX business and lower caustic soda

market prices (mainly trading product) impacted

• rganic growth – underlying development positive

Operative EBITDA margin 13.6% in Q4, 14.3% in 2019

• Value over volume visible in EBITDA and EBIT

combined with cost savings resulting in improved profitability

• Q4 negatively impacted by new plant start-up costs in

China

• *IFRS 16 impact EUR +3.8 million in Q4 and EUR

+14.1 million in 2019

OPERATIVE EBITDA AND OPERATIVE EBITDA-% EUR million REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million

372 369 363 373 369 376 385 390 381 373 383 386 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2019

0% +1% +2% +5% +5% +6% +7% +4%

• 3%

46.0 47.8 48.5 55.4 42.7 45.4 52.3 51.2 50.7 53.7 61.3 52.6 12.4% 13.0% 13.4% 14.9% 11.6% 12.1% 13.6% 13.1% 13.3% 14.4% 16.0% 13.6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4* 2017 2018 2019

+0%

• 3%
• 3%

Industry & Water – profitability improved clearly in 2019

Market environment

• Water treatment market solid
• Shale market slowed down during Q4

Organic growth -1% in Q4, +4% in 2019

• Improved pricing in water treatment
• Oil & Gas: slight revenue growth in Q4; strong

revenue growth in 2019 Operative EBITDA margin 13.8% in Q4, 16.9% in 2019

• Profitability improvement due to active price

management with turnaround in water treatment in North America and Oil & Gas-business

• Q4 impacted by different Oil & Gas mix and new

plant start-up costs in the Netherlands

• *IFRS 16 impact EUR +5.3 million in Q4 and EUR

+20.2 million in 2019

22.9 29.3 36.0 25.3 26.6 34.8 36.7 33.3 45.0 52.4 56.8 37.5 9.6% 11.8% 13.9% 9.6% 10.9%12.8%12.9%12.3% 16.8%18.1%18.5% 13.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4* 2017 2018 2019

OPERATIVE EBITDA AND OPERATIVE EBITDA-% EUR million

238 248 259 264 245 272 284 271 267 290 307 272 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2019

+9% +15% +20% +14%

REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million

+11% +11% +2% +6% +6% +5% +4%

• 1%

Oil & Gas – slight revenue growth in Q4 despite market softness

38 45 57 57 46 56 73 66 62 77 87 66 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2019

REVENUE DEVELOPMENT EUR million

Market environment

• Shale market slowed down during Q4 partly due to year-

end de-stocking; market expectation is that shale market will recover towards the summer

• Oil-field services* customers continued to show good

demand in 2019, solid demand expected to continue in 2020 Q4 slight revenue growth, strong revenue growth in 2019

• Shale market softness visible in shale revenue
• Strong growth in CEOR** polymer sales, oil sands

seasonally lower Capacity investments

• Polymer facility expansion in the Netherlands to facilitate

growth in CEOR**

• Expansion of Oil & Gas polymer facility in Mobile USA in

commercial operation in 2021

*Oilfield services: Canadian Oil Sands and CEOR **CEOR, chemical enhanced oil recovery

We invest in core products globally

PRODUCTS

◼ 25% Bleaching and pulping ◼ 20% Polymers ◼ 20% Other: e.g. defoamers, dispersants, and biocides ◼ 20% Coagulants ◼ 15% Sizing* and strength

Revenue EUR 2,659 million (2019)

*Sizing = Resistance against water absorption

• Bleaching chemicals
• New chlorate plant in Brazil
• New chlorate line in the U.S.
• New chlorate line and peroxide capacity in Finland
• Freed peroxide capacity from ECOX closure in

Sweden

• Polymer capacity additions
• Italy
• UK
• Aberdeen, USA
• Netherlands
• South Korea (start 2021)
• Mobile, USA (start 2021)
• Sizing chemicals – capacity additions due to

integration of acquisitions (Akzo Nobel and China AKD wax)

• Coagulants
• Goole, UK (start 2022)

KEY INVESTMENT FOCUS ON CORE PRODUCT GROUPS SINCE 2016

Note: Revenue by product rounded to the nearest 5%.

Our strategic focus areas

CUSTOMER EXCELLENCE Customer intimacy and ability to capture value Optimized service levels PRODUCT & SERVICE EXCELLENCE Best suited products in terms of performance, resource efficiency and cost Complemented with service and application knowledge OPERATIONAL EXCELLENCE Safe, sustainable and efficient production, operations and processes Reliable deliveries Efficient sourcing MARGIN EXCELLENCE Improvement of profitability across all products and regions Optimized output from the assets

Customer satisfaction improved

Kemira’s strengths: Delivery accuracy Service level Ease of doing business

CUSTOMER SATISFACTION

* Promoter customers (very loyal) – Detractor customers (unhappy), Scale: 0-19 Satisfactory, 20-39 Good, 40+ Excellent. 1,024 customer interviews in 2018 ** New rolling process implemented in 2019

NET PROMOTER SCORE*

28 30 33 36**

2016 2017 2018 2019 1 2 3

Strong results in employee engagement and safety climate

EMPLOYEE SURVEY RESULTS

EMPLOYEE ENGAGEMENT

79

6 PTS ABOVE MANUFACTURING INDUSTRY BENCHMARK

SAFETY CLIMATE

88

THE HIGHEST SCORE IN THE SURVEY

*Total recordable injury frequency per million working hours

Strong engagement Good culture Efficient employee communications

TRIF*

2.1

(2018: 3.5)

Updated climate change target introduced

2030 climate change target introduced

• 30% reduction in combined scope 1 and 2

greenhouse gas emissions by 2030 (baseline year 2018, 0.93 Mt)

– Kemira Scope 1 absolute emissions 2018: 0.15 Mt – Kemira Scope 2 absolute emissions 2018: 0.78 Mt

• Kemira working with suppliers to decrease

carbon footprint of purchased goods and services (scope 3 emissions)

• Our purpose: We enable our customers to

improve their water, energy and raw material efficiency

• Kemira fully supports UNFCCC Paris

Agreement Long-term ambition

• Carbon neutrality by 2045 for combined scope

1 and scope 2 emissions

75/100

TOP 1%

B

TOP QUARTILE

Key operative focus areas in 2020

1. Continue active price management and improve capacity utilization 2. Continue to improve customer satisfaction scores (NPS) 3. Modify product & service offering to cater better profitable growth 4. Improve operational excellence and reduce complexity 5. Realize benefits of added capacity in China, the Netherlands and the U.S. 6. Construction of polymer capacity in the U.S. and South Korea 7. Prudent cost-control in all areas

PETRI CASTRÉN, CFO FEBRUARY 11, 2019

Financials Q4 2019

Favorable price/cost trend continued

84.5

Q4 2018 Sales volumes Sales prices Variable costs Fixed costs Currency impact Other Q4 2019 Adoption of IFRS 16 standard "Pre IFRS 16 comparison"

• 11.1

+13.8 +14.4

• 0.8
• 1.8
• 8.9

OPERATIVE EBITDA BRIDGE EUR million

662

• 4%

+1% 0% 658

Q4 2018 Sales volumes Sales prices Currency impact Acquisitions & Divestments Q4 2019

+2%

REVENUE AND ORGANIC GROWTH (Y-ON-Y) EUR million

Operative EBITDA margin 13.7%

• Focus on value over volume is bearing fruit
• Due to the adoption of IFRS 16 -standard, fixed

costs do not include operating lease expenses in 2019, corresponding to a positive EBITDA impact of EUR +9.2 million in Q4 and EUR +34.3 million in 2019

80.9

• 9.2

90.1

Q4/2019

SALES PRICE VS VARIABLE COST TREND (ROLLING 12-MONTH CHANGE Y-O-Y) SALES PRICES AND VARIABLE COSTS (CHANGE Y-O-Y)

9 5

• 3 -10
• 16
• 20
• 10
• 2
• 2

11 4 8 24 28 32 28

• 9
• 18
• 26
• 23
• 16
• 4

3 11 23 47 42 37 34 23 19 14

• 18
• 23
• 23
• 13

16 13 13 26 36 38 29 11

• 5
• 13
• 14

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 Net impact on EBITDA (sales prices-variable costs) Sales prices Variable costs

Net impact of sales price & variable costs continued to be positive

* 12-month rolling change vs previous year in EUR million

EUR million EUR million

• 180
• 120
• 60

60 120 180 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Brent oil, USD Sales prices* Variable costs*

Items affecting comparability

• Provision of ca. 12 MEUR

related to an existing, old litigation concerning an alleged infringement of competition law in 1994-2000

• Environmental provisions

increased by ca. 8 MEUR due to clean-up of a Finnish manufacturing site closed in 2013

• Restructuring costs in Pulp &

Paper during 2019 due to

• rganizational changes

Items affecting comparability, EUR million Q4 2019 Q4 2018 FY 2019 FY 2018 Within EBITDA

• 20.5
• 3.2
• 27.7
• 8.3

Pulp & Paper

• 20.8

1.8

• 25.8
• 3.9

Industry & Water 0.3

• 5.0
• 1.8
• 4.4

Within depreciation, amortization and impairment 0.0

• 0.5
• 1.9
• 17.3

Pulp & Paper 0.0 0.0 0.0

• 7.9

Industry & Water 0.0

• 0.5
• 1.9
• 9.4

Total items affecting comparability in EBIT

• 20.5
• 3.7
• 29.6
• 25.6

Strong cash flow in 2019

ALL KEY FIGURES IN EUR MILLION

271 205 210 386 2016 2017 2018 2019

CASH FLOW FROM OPERATIONS CAPITAL EXPENDITURE EXCL. ACQUISITIONS

• Cash flow improvement driven by strong results
• IFRS 16 impact EUR +28 million on cash flow from
• perations in 2019
• Kemira’s Pension Fund Neliapila returned excess

capital of EUR 15 million to Group in Q1 2019

• Typically cash flow is H2-weighted, especially due to

changes in net working capital

• In 2019, the largest capital expenditures were related

to polymer expansion in the Netherlands and the U.S., new AKD manufacturing site in China and chlorate expansion in the U.S. CAPEX GUIDANCE 2020

• In 2020, capital expenditure excluding acquisitions,

expected to be approximately EUR 200 million, including:

– New capacity expansion in Oil & Gas polymers in the U.S. – Smaller capex projects in several locations

60 59 53 65 58 65 53 39 95 66 44 98

2016 2017 2018 2019

Expansion Improvement Maintenance

150 190 201 213

ROCE improving clearly, adoption of IFRS 16 increased reported net debt

9.9% 9.7% 9.8% 11.2% 2016 2017 2018 2019 634 694 741 811 Dec 31 2016 Dec 31 2017 Dec 31 2018 Dec 31 2019

NET DEBT (EUR million) AND LEVERAGE RATIO* OPERATIVE RETURN ON CAPITAL EMPLOYED

2.3 2.2 2.1

• ROCE improvement driven by Industry & Water
• Ongoing investment projects are expected to improve

Group’s ROCE once up and running

• Gearing 66% - well within financial target range of

below 75%

• Increase in net debt resulted from the adoption of

IFRS 16 according to which operating leases (EUR 134 million) are part of debt

– Excluding IFRS 16 impact, net debt would have been EUR 677 million and leverage ratio 1.7

– Average cost of net debt excluding leases is 1.9% and duration is 26 months

* Leverage ratio = Net debt / last 12 months operative EBITDA

2.0

Dividend proposed to be increased to EUR 0.56 per share

• Kemira’s dividend policy is to pay a stable

and competitive dividend

• Dividend increase proposed due to strong

profitability and cash flow in 2019

• Board of Directors’ proposes to the AGM a

dividend of EUR 0.56 per share, totaling EUR 85 million. The dividend is proposed to be paid in two tranches in 2020, in April and in November.

• Kemira has paid dividend every year since

listing of shares in 1994

0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.56*

5.8% 4.5% 4.4% 5.4% 4.9% 4.4% 4.6% 5.4% 4.2%

2011 2012 2013 2014 2015 2016 2017 2018 2019

◼ Dividend per share  Dividend yield

Kemira’s dividend yield calculated using the share price at year-end

*Board of Director’s proposal to the AGM 2020

EUR 2.5 billion

2018

EUR 2.6 billion 12.5% 62% EUR 2.7 billion

Outlook for 2020

EUR million 2014 2015 2016 2017 2018 2019 2020

• utlook

Operative EBITDA 253 287 303 311 323 410 increase

Operative EBITDA figures for 2014-2018 are ”pre IFRS-16”.

“Kemira expects its operative EBITDA (2019: EUR 410.0 million) to increase from the prior year.”

OUTLOOK FOR 2020

2019

14-16%

• Around +1%-

point

• Approx. +10%-

points

Revenue Operative EBITDA-% Gearing

Below 60%

2017

12.5% 59%

Financial targets

Above-the- market growth 15-17% Below 75%

15.4% 66%

PRE IFRS 16

Previously Kemira referred to these three targets as mid-to-long term financial targets, but will refer to them only as financial targets going forward.

FINANCIAL TARGETS*

Appendix

SEGMENT SPLIT PRODUCTS

GEOGRAPHIES

Kemira in brief

2019: REVENUE EUR 2,659 MILLION, OPERATIVE EBITDA EUR 410 MILLION, OPERATIVE EBITDA MARGIN 15.4%, OPERATIVE ROCE 11.2%

◼ 25% Bleaching and pulping ◼ 20% Polymers ◼ 20% Other: e.g. defoamers, dispersants, and biocides ◼ 20% Coagulants ◼ 15% Sizing and strength

Revenue by geographies and product category represent FY 2019.

40% AMERICAS 1.USA 2.Canada 3.Brazil 50% EMEA 1.Finland 2.Sweden 3.Germany 10% APAC 1.China 2.South Korea 3.Thailand

◼ 57%

Pulp & Paper

◼ 43%

Industry & Water

CUSTOMERS Several thousand customers TOP 10 customers are ~25% of revenue TOP 50 customers are ~50% of revenue EXAMPLES OF LARGEST CUSTOMERS

Municipalities, e.g. Frankfurt, Berlin, New York, Paris, Shanghai, Singapore #1 in water treatment in NA and Europe #2 in friction reduction in North American shale oil & gas #2 globally

Note: Revenue by industry, product and geography rounded to the nearest 5%

1,417 1,457 1,477 1,520 1,523 171 195 198 192 218 2015 2016 2017 2018 2019

REVENUE BY PRODUCT CATEGORY

REVENUE BY CUSTOMER TYPE AND MARKET GROWTH

Pulp & Paper – strong business with solid track record

MARKET ENVIRONMENT REVENUE BY GEOGRAPHIES AND MARKET GROWTH BY REGION CUSTOMER EXAMPLES

◼ 50% EMEA ◼ 35% Americas ◼ 15% APAC ◼ 40% Bleaching & pulping ◼ 25% Sizing & strength ◼ 20%

Defoamers, dispersants, biocides and

• ther process

chemicals

◼ 10% Polymers ◼ 5% Other ◼ 40% Pulp ◼ 20% Printing & writing papers ◼ 40% Board & tissue

• 1-2%

2-3% 1-2% Market growth 2-3% 0-1% 1% Market growth

Nouryon (pulp) #3 Solenis (paper)* #1 Kemira (pulp and paper) m.s. ~16% #2 Ecolab (paper) #4

Note: Revenue by industry, product and geography rounded to the nearest 5%

* Solenis-BASF combined entity

Kurita (paper) #5 REVENUE AND OPERATIVE EBITDA

EUR million

REVENUE BY PRODUCT CATEGORY

REVENUE BY APPLICATION TYPE AND MARKET GROWTH

Industry & Water – strong positions in chosen categories

REVENUE BY GEOGRAPHIES AND MARKET GROWTH BY REGION

◼ 40% Coagulants ◼ 40% Polymers ◼ 20% Other products such as defoamers and biocides

2-3% 5-6% 2-3%

◼ 45% EMEA ◼ 50% Americas ◼ 5% APAC ◼ 65% Water treatment ◼ 10% Other ◼ 25% Oil & Gas

5-6% 3-4% 3-4%

WATER TREATMENT

Amsterdam Barcelona Frankfurt Berlin Oslo Paris Stockholm Los Angeles Montreal New York City Toronto Melbourne Shanghai Singapore

OIL & GAS

Note: Revenue by industry, product and geography rounded to the nearest 5%

Market growth Market growth

CUSTOMER EXAMPLES

REVENUE AND OPERATIVE EBITDA

EUR million

MARKET ENVIRONMENT

Market share ~30% in coagulants and ~20% in polymers Main competitors in coagulants:

• Feralco (Europe)
• Kronos (Europe)
• Chemtrade (NA)
• USAlco (NA)

Market share ~25% in polymers used in shale

• il & gas

Main peers in polymers (also in water treatment):

• SNF
• Solenis*
• Solvay (only O&G)

MUNICIPAL (40%), customer examples INDUSTRIAL (60%), customer examples

Municipal Industrial

956 906 1,009 1,073 1,136 116 107 114 131 192 2015 2016 2017 2018 2019

2015-2016 figures are pro forma; combination of Municipal & Industrial and Oil & Mining segments * Solenis-BASF combined entity

VARIABLE COST SPLIT 2019 EUR 1.5 billion TOP 12 RAW MATERIALS BY SPEND

1. Sodium hydroxide (caustic soda)* 2. Acrylonitrile (OD) 3. Petroleum solvents (OD) 4. Aluminium Hydrate 5. Colloidal silica dispersion* 6. Acrylic Acid (OD) 7. Amines (OD) 8. Alpha olefin (OD) 9. Sodium chloride (salt)

• 10. Sulphuric acid
• 11. Acrylic ester (OD)
• 12. Fatty acid (OD)

Top 12 account for 52% of Kemira’s raw material spend OD = Oil & gas derivative * Mainly trading materials

EXPOSURE TO OIL RELATED RAW MATERIALS

Kemira’s variable cost split and top raw materials

◼ 35%

Oil & gas related

◼ 65%

Not oil related

◼ 70%

Raw materials

◼ 15%

Electricity & energy

◼ 15%

Logistics

Figures rounded to the nearest 5%

Key figures

EUR million Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 2019 2018 Revenue 657.7 689.8 663.6 647.8 661.8 2,658.8 2,592.8 Operative EBITDA 90.1 118.1 106.1 95.6 84.5 410.0 323.1 margin 13.7% 17.1% 16.0% 14.8% 12.8% 15.4% 12.5% Operative EBIT 42.4 71.1 60.3 50.1 44.8 224.0 173.8 margin 6.4% 10.3% 9.1% 7.7% 6.8% 8.4% 6.7% Net profit 8.6 43.3 35.2 29.3 26.5 116.5 95.2 Earnings per share, diluted, EUR 0.05 0.27 0.22 0.18 0.17 0.72 0.58 Cash flow from operations 142.5 121.3 57.2 65.2 88.2 386.2 210.2 Capex excl. acquisitions 81.4 51.5 39.9 28.3 53.2 201.1 150.4 Net debt 811 866 921 842 741 811 741 NWC ratio (rolling 12 m) 10.7% 11.1% 10.9% 10.6% 10.2% 10.7% 10.2% Operative ROCE (rolling 12 m) 11.2% 11.5% 10.8% 10.3% 9.8% 11.2% 9.8% Personnel at period-end 5,062 5,036 5,067 4,973 4,915 5,062 4,915

Cash flow

EUR million Q4 2019 Q4 2018 2019 2018 Net profit for the period 9 27 116 95 Total adjustments 81 59 302 220 Change in net working capital 83 17 45

• 51

Finance expenses

• 9
• 6
• 39
• 30

Income taxes paid

• 21
• 7
• 39
• 24

Net cash generated from operating activities 142 88 386 210 Purchases of subsidiaries and business acquisitions, net

• f cash acquired
• 1
• 44
• 3
• 43

Capital expenditure excl. acquisition

• 81
• 53
• 201
• 150

Proceeds from sale of assets 1 8 7 Change in long-term loan receivables 5 5 Cash flow after investing activities 60

• 3

190 29

Currencies

Currency exchange rates had around EUR +53 million impact on revenue and EUR +17 million impact on the operative EBITDA in 2019 compared to 2018. Guidance: 10% change in our main foreign currencies would approximately have EUR 15 million impact on operative EBITDA on an annualized basis.

◼ 41% EUR ◼ 7% Others KEMIRA REVENUE DISTRIBUTION 2019 KEMIRA COST DISTRIBUTION 2019 ◼ 2% SEK ◼ 4% CNY ◼ 4% CAD ◼ 38% USD ◼ 6% Others ◼ 6% CNY ◼ 5% CAD ◼ 6% SEK ◼ 31% USD ◼ 41% EUR ◼ 2% BRL ◼ 2% GBP ◼ 3% GBP ◼ 2% PLN

Pulp & Paper

KEY FINANCIALS EUR million Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 2019 2018 Revenue 385.9 382.9 373.4 380.8 390.4 1,522.9 1,520.2 Operative EBITDA 52.6 61.3 53.7 50.7 51.2 218.3 191.7 margin 13.6% 16.0% 14.4% 13.3% 13.1% 14.3% 12.6% Operative EBIT 22.5 32.1 24.0 20.6 24.1 99.2 91.6 margin 5.8% 8.4% 6.4% 5.4% 6.2% 6.5% 6.0% Operative ROCE*, % 7.7% 7.9% 7.6% 7.7% 7.8% 7.7% 7.8% Capital expenditure (excl. M&A) 43.6 25.4 23.3 17.3 28.8 109.7 85.1 Cash flow after investing activities 33.5 44.6 36.2 25.1

• 13.5

139.4 29.9

*12-month rolling average

KEY FINANCIALS

Industry & Water

EUR million Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 2019 2018 Revenue 271.8 306.9 290.2 267.0 271.5 1,135.9 1,072.6 Operative EBITDA 37.5 56.8 52.4 45.0 33.3 191.7 131.5 margin 13.8% 18.5% 18.1% 16.8% 12.3% 16.9% 12.3% Operative EBIT 19.9 39.0 36.3 29.5 20.8 124.7 82.2 margin 7.3% 12.7% 12.5% 11.0% 7.7% 11.0% 7.7% Operative ROCE*, % 17.6% 18.4% 16.9% 15.4% 13.6% 17.6% 13.6% Capital expenditure (excl. M&A) 37.8 26.0 16.5 11.0 24.4 91.4 65.3 Cash flow after investing activities 57.3 37.9 5.7 27.8 23.8 128.7 52.5

*12-month rolling average

FY 2019

Revenue split by country

USA 27% Canada 7% Brazil 2% Uruguay 2% Other Americas 2% Finland 15% Sweden 5% Germany 4% Poland 2% UK 4% Spain 2% Other APAC 6% China 4% Russia 2% Netherlands 2% France 2% Italy 2% Other EMEA 9% Norway 1%

Important information about financial figures

Kemira provides certain financial performance measures (alternative performance measures)

• n non-GAAP basis. Kemira believes that alternative performance measures, such as organic

growth*, EBITDA, operative EBITDA, cash flow after investing activities, and gearing followed by capital markets and Kemira management, provide useful information of its comparable business performance and financial position. Selected alternative performance measures are also used as performance criteria in remuneration. Kemira’s alternative performance measures should not be viewed in isolation to the equivalent IFRS measures and alternative performance measures should be read in conjunction with the most directly comparable IFRS measures. Definitions of the alternative performance measures can be found in the Definitions of the key figures in this report, as well as at www.kemira.com > Investors > Financial information. All the figures in this interim report have been individually rounded and consequently the sum

• f individual figures may deviate slightly from the sum figure presented.

* Revenue growth in local currencies, excluding acquisitions and divestments